Your business is growing. So are the needs and requirements of your financial accounting software.​​An important question to ask yourself before you upgrade – should your software be in-house or in the cloud?

When small businesses first start out, many turn to basic accounting packages (i.e. QuickBooks) that serve them well – for a while. But as your business grows, you may find that basic accounting software is unable to meet the needs of your growth.

​ Should your accounting software be in-house or in the cloud?

Each has its pros and cons, and ultimately the choice rests on the needs and goals of your business.​

On-Premise Financial Accounting

​​Pros

Internet connectivity not critical

Secure access on-premise

More flexibility about if/when to upgrade

Greater customization available

​Cons

High upfront costs

Longer install time (ordering hardware, etc)

Need internal IT resources to maintain server

Cost of updates to system not included

When you have your accounting system in-house, your business data is kept close and secure. You don't have to worry about security leaks, threats or third-party access to your data. As long as your systems remain secure, your accounting data also remains safe.​The upfront costs of having an accounting package in house can be substantial. Your business needs to purchase servers and other IT infrastructure pieces to host the software, and you also need to have either in-house or on-call IT support available to handle the day-to-day technical needs for the server.​

Cloud-based Financial Accounting

Pros

Low upfront costs

Quick to install/implement

Server maintenance included

Free upgrades to latest version

Cons

Internet connectivity needed for it to be usable

Access via the internet, so some exposure (security)

Mandatory updates

Restrictions on customization/reporting depending on the level of interaction you need

By using a cloud-based accounting solution, you don’t need to build an internal IT infrastructure to install and support it. Your provider will deploy the software to its servers that your company then accesses through a secure connection. It can be deployed quickly, and your provider should also manage software updates and security.​It's critical that you look at all the costs of cloud-based financial accounting software. While the upfront costs of an on-premise solution can be higher, the long-term costs of the cloud-based solution may be even higher (especially if you already have other servers in house). The cloud-based solution also requires a reliable Internet connection, because when it goes down, your access to the accounting system does too.

Which package is the best solution for your business?

If you have an existing IT infrastructure and staff, an on-premise accounting solution may be the best choice. It will keep your data close and you can manage the upfront costs because most of the infrastructure is already in place.

If you don't have an existing IT infrastructure or team (and have no desire to make that investment right now) a cloud-based financial accounting package may be the best option for your business, as you can get the solution deployed quickly.